Watch Out for “Easy Fixes”

Debt consolidation can be an alluring option for many, and there are many advantages to debt consolidation.  It’s the easy fixes designed to take advantage of consumers that you have to be aware of to avoid.

This is “too-good-to-be-true” Debt Consolidation Company:
All I can stress is, they are too good to be true.  Just like you credit card agency, these companies are not your friends.  They make a fee off of your monthly payments; that’s how they make the money to stay in business. 

An easy does-it-loan:
If you already have bad credit, or are perceived as “at-risk,” you may not qualify for a debt consolidation loan.  These loans are not a piece of cake to get, and often consumers with a poor credit history are offered a different loan that may have extremely high interest rates.  Though the monthly payments on that loan may be less than the debt you currently have, if the interest rate is higher, it is not beneficial in the long run.

A balance transfer:
The balance transfer route is a little harder to find folly in.  For a consumer with little debt, a balance transfer when the offer is right can be very beneficial and can temporarily relieve the stress of monthly payments.  For consumers severely in debt the balance transfer offers only delay the debt repayment—and they ruin your credit in the process.  After consumers accept the initial string of balance transfer offers, eventually they show up on your credit report and you no longer receive the offers, thus leaving you with a high rate credit card.  ■